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The Real Estate Beat

The Caton Team believes, in order to be successful in the San Fransisco Silicon Valley Real Estate Market we have to think and act differently. We do this by positioning our clients in the strongest light, representing them with the upmost integrity, while strategically maneuvering through negotiations and contracts. Together we make dreams come true.

Although now may be a good time to buy a house, it is not as good a time as it was four years ago, Buffett stated at the Berkshire Hathaway annual shareholders meeting in Omaha, Nebraska. Fortune reported that Buffett thinks the chances of housing prices collapsing are very low.

Fortune reported:

“I don’t see a nationwide bubble in real estate right now at all,” said Buffett.

Buffett made remarks at the annual meeting Berkshire Hathaway, which took place on Saturday in Omaha. “In Omaha and other parts of the country people are not paying bubble prices for real estate,” says Buffett.

The report showed a national 0.4 percent month-over-month increase from January to February, and a 5.6 percent annual jump between February 2015 and February 2016. January’s HPI report showed a 0.5 percent increase, which was revised downward to reflect a 0.4 percent increase.

The S&P/Case-Shiller U.S. National Home Price Index (HPI) found that home prices rose for the 43rd consecutive month in November 2015. According to the HPI report, home prices rose 5.3 percent year-over-year in November, slightly up from the 5.1 percent increase recorded in October 2015.

“Home prices extended their gains, supported by continued low mortgage rates, tight supplies and an improving labor market,” said David M. Blitzer, Managing Director and Chairman of the Index Committee at S&P Dow Jones Indices. “Sales of existing homes were up 6.5 percent in 2015 vs. 2014, and the number of homes on the market averaged about a 4.8 months’ supply during the year; both numbers suggest a seller’s market.”

The topic of bubbles forming in the housing market is something that has been thrown around for quite some time. As home prices soar to new heights—with no sign of decline—housing bubbles appear to be popping up in many markets and may be here to stay, according to Zillow’s Home Price Expectations Survey.

“Without 20/20 hindsight, it’s difficult to identify bubbles as they’re happening, but it is very clear that nationally we are not seeing a return of the conditions that caused the last national bubble,” said Dr. Svenja Gudell, Zillow’s Chief Economist. “Tighter lending restrictions today mean we aren’t seeing buyers get loans they realistically can’t pay back, like we did in years past. It’s significant that some experts are starting to worry about bubble conditions, but in my opinion, there’s no real danger of a severe crash like the one we all remember from the last decade.”

My two cents – talk of a housing bubble is a buzz here in the San Francisco Bay Area. Though no one has a crystal ball – and as much as I want to tell my home buyers to hold tight – prices will come down – I cannot because I don’t see that in the forecast.

Here is what we are experiencing the San Francisco Bay Area – We have had a BOOM in population due to job growth. Most are in the tech industry – but we also have a strong Bio-Tech job market. So we have a great job market – and yes I am taking into account the lay offs in Silicon Valley – but we also have very low inventory and very high demand for the past couple of years. Loans are harder to get – meaning we cannot expect a crash due to bad loans. In fact, the interest rate is still low though there is talk of raising it. And while interest rates are low – borrowed money goes a bit further. The only sign I see is the stock market. With its drops – some of the cash buyers were counting on has disappeared – for the moment. But that’s not enough to stop the housing market.

I know my selling clients are figuring out ways to sell their home now. And I see my buying clients getting discouraged with the pace of the market. But if there is only one piece of advice I can bestow to you now is this – if you can and want buy a home in the San Francisco Bay Area – do it now. Even if there is a slow down in the market, even if prices level off, historically – since the dawn of time, Real Estate has always recovered and always at a higher price than before the fall.

I don’t see a crash coming. I do see a market adjustment as buyers dictate what they are willing to pay for a home. And as money gets tight and the dream of home ownership stays strong – we will see a change. But I wouldn’t hold my breath for a crash.

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Sabrina Caton - The Caton Team Realtors

Sabrina is a native Californian born and raised in the Silicon Valley with a passion for Residential Real Estate. Partnered with her mother-in-law Susan - they are The Caton Team. With over 35 years of combined, local Real Estate experience and knowledge – would’t you like The Caton Team to represent you? Let us know how we can be of service. Contact us any time. Call | Text at: 650-799-4333 | Email Info@TheCatonTeam.com
The Caton Team believes, in order to be successful in the San Fransisco | Peninsula | Bay Area | Silicon Valley Real Estate Market we have to think and act differently. We do this by positioning our clients in the strongest light, representing them with the utmost integrity, while strategically maneuvering through negotiations and contracts. Together we make dreams come true. The Peninsula is our backyard - let us help make it yours. We represent Buyer’s and Seller’s throughout the Bay Area.
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